Report: Hosted CRM Reconsidered

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Companies will reconsider their hosted CRM applications in 2005, according to Nucleus Research, a Wellesley, MA, research company. Its "Top 10 IT Predictions for 2005" report released yesterday is based on ongoing analysis of end-user clients and in-house vendor research.


Though the hosted model works in some situations, "companies will begin to reconsider the ongoing cost of hosted CRM agreements and look at hybrid and other models that they can use in maturity without paying for in perpetuity," the report said. Other 2005 trends include:


· Business intelligence is expected to heat up the enterprise resource planning market. ERP vendors will offer expanded BI capabilities to lure new customers.


· E-commerce is the new hosted CRM. More companies will look to outsource their e-tail channel instead of maintaining and updating costly on-premise e-commerce and catalog applications.


· Maintenance fees become the next battlefield. Customers are tired of paying for upgrades they may never need and licenses they rarely use and will get tougher on negotiating fees. Vendors won't want to give up the profit margin, but will have little choice as customers turn to competitors for a better price.


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